BOSTON—Colliers International released its Second Quarter 2014 Greater Boston Market Viewpoint report, saying that occupancy gains in the market continued in the second quarter.
Over the first six months of 2014, the vacancy rate declined from 16.8% to 16.3% and net occupancy increased by 2.3 million square feet. Mid-year results are positive in both the urban and suburban markets and the 16.3% vacancy rate is the lowest it has been since the fourth quarter 2008.
• Despite a slight uptick in the downtown Boston vacancy rate this quarter, conditions are stabilized and lease transaction velocity is on pace to meet or exceed 2013 levels. Demand is solid, and a number of projects are actively under construction or in the development pipeline.
• Expansion requirements from existing Cambridge office and lab tenants is fueling demand headed into the second half of 2014. As a result of tightened conditions and escalating rents, a number of properties traded in both the East Cambridge and Alewife submarkets during the past six months.
• Fundamentals in the Suburban markets have been steadily improving, with 8 out of the past 10 quarters having posted positive absorption. Tenants are faced with fewer space options, which has been driving up rents and pushing demand further into the broader market.
• The amount of capital looking to be deployed in the Greater Boston market is abundant and aggregate sales volume is on pace to be the highest level since 2007. Please refer to the Capital Markets section of the report for a summary of recent transactions.